Chairperson’s statement
OPERATING ENVIRONMENT
FY24 was a pivotal year for EcoCash Holdings, characterized by a drive to consolidate and expand our services, building on the efforts and achievements of the preceding year. During the year, EcoCash Holdings navigated a dynamic operating environment characterized by evolving market trends and regulatory changes. We remained agile and adaptive, capitalizing on emerging opportunities while addressing challenges to sustain our leadership in the digital financial services sector. Our dedication to delivering cutting-edge solutions and customer-centric services has positioned us at the forefront of the evolving digital financial landscape.
KEY DEVELOPMENTS
Scheme of Reconstruction
The EGM to consider and approve the proposed scheme of reconstruction was held on the 17th of April 2024. The shareholders approved the scheme of reconstruction where all non-banking assets will be transferred from EcoCash Holdings Zimbabwe Limited to Econet Wireless Zimbabwe Limited. The Scheme of Reconstruction will not result in the delisting of EcoCash Holdings Zimbabwe Limited from the Zimbabwe Stock Exchange.
Subject to regulatory approval, only the banking unit, Steward Bank, will remain under EcoCash Holdings and has been classified as Continuing Operations in the audited Financials under review. Businesses transferring to Econet have been classified as Discontinuing Operations and are shown separately in the Financial Statements in line with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”.
OPERATIONS REVIEW
Continuing Operations
Digital Banking
The financial year under review reflects a decade of Steward Bank promoting digital financial inclusion through pioneering products and services in the Zimbabwean market. The bank has been at the forefront of competitiveness in the banking industry pushing boundaries to provide innovative banking solutions.
The banking services division has observed considerable growth in the adoption of USD banking services. Notably, VISA card transaction values achieved a 115% increase affirming the bank’s position as a market leader.
The increasing prevalence of USD transactions in the economy has been followed by considerable growth in FCA accounts. To further enhance the USD banking experience for customers, Steward Bank introduced the FCA Debit card, providing added convenience for local USD transactions. This addition aligns with our commitment to offering seamless and accessible banking services. The Point of Sale (POS) network saw improved devices distributed throughout our network of merchant partners for acquiring both local currency and USD transactions on the same POS device.
The launch of the Agent Portal to support the agency banking model during the year has significantly improved access for Steward Bank customers. With the integration of USSD services, the Agent Portal enables customers to access banking services through a simple mobile device, expanding the reach of our services to 130 locations and improving customer experience.
Steward Bank is fully compliant with the Tier 1 capital requirements prescribed by the Reserve Bank of Zimbabwe.
Discontinued Operations
Mobile Money
The mobile money business experienced consistent growth in customer base, transaction volumes and values particularly for USD transactions, due to the efficient distribution network, enhanced customer experience, and sustained innovation. EcoCash also reintroduced Kashagi loans in USD, making the loan application process instant and hassle-free. The mobile money partnership network expanded significantly, enabling various sectors such as agriculture, corporates, NGOs, and pensions to process payroll and cash disbursements conveniently. Integration of USD payments rails with partners and banking institutions further strengthened EcoCash’s value proposition, providing customers with a wider range of services and benefits.
Insurtech
EcoSure, the life insurance division, witnessed growth in the core funeral value proposition and relaunched the “Enda Education Cover” to provide comprehensive coverage for your child’s education in case of unfortunate events. The year saw the introduction of “Airtime Cover,” a unique bundled product that bundles airtime and data purchases with life insurance cover. The company has seen significant growth in USD policies, on account of synergies realized from the uptake of the USD EcoCash wallet.
The short-term insurance business, Moovah, has forged strategic partnerships to enhance the efficiency of insurance claim resolutions, particularly for vehicles. The number of customer touch points for vehicle insurance has increased from 150 to 250 by the end of FY24, resulting in an increase of our market share. The goal is to provide exceptional service standards and convenience for our customers, with partnerships benefiting key sectors such as mining, manufacturing, tourism, and agriculture.
Other business segments
Vaya Technologies has focused on nurturing anchor businesses in Healthtech, Agritech, and On-Demand Services. They have expanded their offerings and delivered innovative solutions in these sectors. One of Vaya Technologies’ recent launches, ‘Asset Track,’ is an IoT-powered solution that has contributed to a 32% growth in connections. Vaya Technologies is committed to enhancing and optimizing products and services in these sectors, driven by a strong belief in the potential and opportunities they offer.
FINANCIAL PERFORMANCE
On the 5th of April 2024, Statutory Instrument 60 of 2024 was gazetted where the Reserve Bank of Zimbabwe issued a new currency, Zimbabwe Gold (ZiG), which replaced the Zimbabwe Dollar. This report has been presented in ZW$ which is the reporting currency for the year ended 29 February 2024.
The report of the Directors is based on inflation-adjusted financial statements, which are the primary financial statements. Historical financial statements have been presented as supplementary information. To comply with International Accounting Standard 29 – Financial Reporting in Hyperinflationary Economies (IAS 29) in the preparation of our financial statements, the Group estimated and applied inflation rates for the year ended 29 February 2024 based on the Total Consumption Poverty Line published by ZIMSTAT. The Directors caution users of the financial statements on the usefulness of these reported inflation-adjusted financial results, in light of distortions that arise when reporting in a hyperinflationary economy.
The results for Ecocash Holdings continuing operations exclude the businesses transferring to EWZL in line with IFRS 5 “Non-Current Assets Held for Sale and discontinued operations”.
EcoCash Holdings recorded revenue of ZW$874.7 billion for the period, a 64% increase from the prior period’s ZW$534.1 billion. Profit for the year was ZW$287.3 billion, a 423% increase from prior year loss of ZW$89 billion. Foreign exchange losses from debentures reduced by 40% compared to prior year following the settlement of the debentures during the year. The Group is confident that the Bank’s contribution will grow next year on the back of the Bank’s diversification strategy.
The loss for the year from discontinued operations was ZW$42.1 billion, a reduction from the previous year’s position of ZW$151.6 billion due to the cost optimisation that increased operational efficiencies.
The business continues to leverage on technology to strengthen the control environment in line with the combined assurance model.
DIVIDEND DECLARATION
The Directors have decided not to declare a dividend for the period under review as they continue to assess the economic environment.
SUSTAINABILITY
The Group maintains a steadfast dedication to upholding the principles of the Global Reporting Initiative (“GRI”) protocol. This dedication aligns with internationally recognized frameworks for responsible business conduct, including the UN Global Compact’s ten principles. Our commitment extends to ensuring long-term sustainability by adhering to robust environmental, social, and governance (ESG) practices. Our ESG approach is aligned with the relevant Sustainable Development Goals (“SDGs”). We are committed to sustainable development within our operating environment. As we strive for long-term business success, we persistently reinforce our sustainability practices and values throughout our operations, continuously seeking improvement.
BUSINESS OUTLOOK
Post the Scheme of Reconstruction, the Bank, which will be the remaining unit under EcoCash Holdings, is poised to drive a digital banking expansion as it invests in technologies to enhance operational efficiencies and increase the product offering to customers. These technological innovations will necessitate a parallel scaling up of the Bank’s underlying systems and processes and grow shareholder value.
The businesses being transferred to EWZL post the scheme of reconstruction will leverage on the MNO customer base and technologies to scale up and increase operating efficiencies through leveraging on synergies.
APPRECIATION
On behalf of the Board, I extend heartfelt gratitude to our customers, business partners, shareholders, and other stakeholders for their unwavering support. I would also like to extend my gratitude to the EcoCash Holdings employees, management, executive team, and my fellow directors for their effort during the year under review. Their unwavering passion, commitment, and dedication has been pivotal to ensuring our continuous growth and prosperity.
On behalf of the Board
Sherree Shereni
Board Chairperson
24 June 2024
About EcoCash Holdings Zimbabwe
EcoCash Holdings Zimbabwe is a technology Group that leverages digital and financial technologies to build shared economies, drive financial inclusion and promote economic empowerment.
We envision a digitally connected future that leaves no Zimbabwean behind by providing innovative solutions that meet the needs of ordinary people.
Our values are integrity, service, responsibility and accountability.